Islamic Jihad, which is headed by Ramadan Abdullah Shalah, is the Palestinian organization closest to Iran, supporting it financially and providing almost its entire budget.

Iran’s support for Islamic Jihad has been exclusive, and any reduction in that aid affects the organization’s activity.

In recent years most of that activity has been carried out in the Gaza Strip, from where Islamic Jihad fires rockets at Israel and sometimes tries to mount terror attacks in southern Israel.

Iran financially backs Islamic Jihad and Hamas despite the fact that they are Sunni “resistance organizations” – unlike Hizbullah, which is Shiite. Iran, however, wants to use the two Sunni groups’ terror activities against Israel.

In recent years Iran has equipped and armed them for attacking Israel from Gaza. Among other things, Iran wants to use activate them in case Israel decides to attack Iran’s nuclear facilities.

In recent years, however, Iran has also significantly scaled back its budget for Hamas because of disputes with the head of its Political Bureau, Khaled Mashal, over the civil war in Syria and over Hamas’s stance toward the crisis in Yemen.

As a result, the budget for Hamas was cut and the group was forced to reduce its military activity.

On May 25, 2015, Al-Quds Al-Arabi reported that Islamic Jihad’s financial crisis had worsened to the point of bankruptcy, and that its operatives had not received their salaries for the three previous months and apparently not for the fourth month either.

The report said a dispute had broken out between the organization and Iran, with Iran demanding that it openly take an official stance against the military activity of the Saudi-led Arab coalition in the Yemeni crisis, just as Hizbullah has done, but Islamic Jihad refused.

Iran is pursuing a policy of “money talks,” and having failed to dictate its position on Syria and Yemen to Hamas and Islamic Jihad, it has been sanctioning them by withholding funds essential to their activity.

On May 19 the east Jerusalem newspaper Al-Quds reported that the leader of Islamic Jihad had recently visited Tehran several times in an attempt to resolve the crisis, and that Hizbullah had tried to mediate – but to no avail because Islamic Jihad wants to maintain a neutral stance toward the Yemeni crisis.

The halting of Iran’s financial assistance, if it continues over time, could severely hamstring the organization.  Whereas Hamas has other sources of income, such as the taxes it levies in Gaza, Islamic Jihad is completely dependent on Iranian money for its existence.

Iran is possibly punishing the organization to teach it a lesson. In the long term, Iran needs Islamic Jihad; it cannot allow itself to lose a military force that directly threatens Israel and is subservient to Iran’s will.